Lorain County Port Authority OKs $2 million deal on Ford Motor Company electric vehicle plant (UPDATED)

This story has been updated to correct the number of auto workers striking Ford. The Lorain County Port Authority Board of Directors voted unanimously on Wednesday to approve a series of transactions that will mean income for the Port Authority and millions in savings on construction costs for Ford Motor Co. as it builds an electric vehicle plant in Lorain County. Ford announced in June 2022 that it would spend $1.5 billion and add 1,800 jobs at the Ohio Assembly Plant, which straddles Avon Lake, Sheffield and Sheffield Lake. On Wednesday, the Port Authority voted to approve a land, construction and lease deal with Ford. The deal is expected to close Sept. 27. It works like this: The Port Authority leases the property on which the plant is to be built from Ford for $5 per year for five years during construction. The port authority then works with Ford and the Rudolph Libbe Group to build the facility to Ford's specifications. At that point, the port authority will lease the facility back to Ford for $20,000 annually. Ford will pay the Lorain County Port Authority a total of about $2.1 million, while saving an estimated $17 million in sales tax by using the port authority's sales tax exemption throughout the process. Port authorities in Ohio do not pay sales tax, and the group's involvement helps Ford avoid sales taxes on steel and other construction materials, port authority Director Jim Miller said. "So we spend no money and they pay all of our fees" including attorney fees, he said. It is the largest deal of its kind in Ohio and an economic development tool available to port authorities and companies looking to do business in the state, Miller said. The deal maintains a "chain of title" allowing the Port Authority to make money and Ford to save money, Port Authority attorney Connie Carr said. It's also "less risky" for the agency to do it this way, she said, because Ford "is going to be doing everything." "The reason we want to do this is because a lot of jobs will be created by this facility" and more than make up for the sales tax revenue Ford would have paid, Miller said. "It's just one of the economic development tools that we have." Other companies have also approached Miller to work out similar deals, he said. Ford is worth about $50 billion. United Auto Workers has 150,000 members, though not all are striking the company — one of the "big three" automakers in Detroit. Miller said it is the largest fee ever received by an Ohio port authority for such a deal, in a deal nearly identical to one worked out by General Motors at its former Lordstown plant in Trumbull County. Miller said the Lordstown deal was worth slightly less than the Lorain County deal — about $1.8 million for Western Reserve Port Authority in Mahoning and Trumbull counties compared to the more than $2 million the Lorain County Port Authority will receive. The same attorneys who worked on the Lordstown deal are working on the Lorain County deal, Miller said. GM's Lordstown plant closed in 2019, but a small electric vehicle battery factory is now on site, a $2.3 billion joint venture of GM and the South Korean company LG Chem that was announced in late 2019. According to an article on CNN.com on Sept. 9, the joint GM/LG plant known as Ultium is one-third of the size of the closed Lordstown plant and began building electric vehicle batteries in August 2022. The plant has 1,100 hourly workers, who voted to join the UAW in December 2022, according to CNN. They won pay raises in a deal worked out between UAW and GM last month. Contact Dave O'Brien at (440) 329-7129 or dobrien@chroniclet.com.